Editorial Board Roundtable: United Airline's bombshell

Date: February 3, 2014
Type: Media Article

United Airlines officials said Monday that there is nothing the city of Cleveland could have done --or can do, at this point -- to persuade United to keep its hub in Cleveland. The airline still must satisfy an audit the Ohio attorney general is empowered to undertake per a 2010 settlement agreement related to the United-Continental merger to show that its losses were sufficiently large to justify such major cuts in departures. 

Mayor Frank Jackson and airport boss Ricky Smith implied at a news conference that, while the city has worked hard to keep the hub, it also recognizes the odds were against it. Jackson and Smith suggested the city was prepared to handle it with a lean cost structure and a lease with United that means it will be paying, until 2027, rent and debt service on Concourse D, built to accommodate the regional jets that make up most of the United departures slated for elimination.

Jackson and Smith say the city will survive this blow because of strong local demand for air travel and interest among other carriers to fill part of the void, but it's hard not to notice that at other mid-sized cities like Pittsburgh and Cincinnati that were "de-hubbed," air travel's cost rose and convenience fell.

Should Cleveland have seen this coming and done more to prepare? What can we do now to mitigate the impact? Our editorial board members weigh in with their preliminary thoughts and we seek your input in the comments below.

Thomas Suddes, editorial writer:

Famous last words:

The date: Oct. 24, 1978.

The speaker: Jimmy Carter, then president, and clueless as ever:

“It is a special pleasure for me today to sign into law the Airline Deregulation Act. This legislation will permit us to achieve two critical objectives. One is to help our fight against inflation. And the other one is to ensure American citizens of an opportunity for low-priced air transportation," Carter said.

What is now happening to Cleveland is the fruit of legislative seeds that Carter and others, such as Sen. Edward M. (Ted) Kennedy, planted. Their regulatory “philosophy” amounted to only a slight rewrite of "Engine Charlie” Wilson’s 1953 statement about General Motors: “For years, we thought what was good for our country was good for United Airlines, and vice versa.” That is, public and private interests supposedly coincide. But the history of industrial and airline disinvestment, and not just in Greater Cleveland, proves otherwise.

Peter Krouse, editorial writer, Northeast Ohio Media Group:

If you take United at its word -- that its hub in Cleveland has been losing money for years -- how can you argue with its decision to eliminate unprofitable connecting flights from scores of cities across the country? It would be great if United kept the hub out of allegiance to Cleveland because the city benefits from all those direct flights to and from relatively obscure places. But if United is losing money in the process, what choice does it have? That said, given everything Cleveland and its business community have done to help United, and its predecessor Continental, make the hub work, I do think a more detailed explanation of the hub's performance is called for. Hopefully that will be provided in an audit by the Ohio Attorney General's Office.

Sharon Broussard, editorial writer, Northeast Ohio Media Group:

I don't know what Cleveland could have done to prepare for United's departure besides keeping its costs low for Concourse D. United was under no obligation to tell the city 10 years ago, or 9, or 8 years ago, that it might not be around for long, apparently.

Still, it's hard to believe that United Airlines suffered through 10 years of unprofitability before it got up the nerve to call it quits with Cleveland. That's an assertion that the Ohio attorney general should fact-check before accepting this excuse. It is easier to swallow United's claim that it has to end Cleveland's hub status because people are skipping the Cleveland hub for other hubs with more flights and that tighter federal rules on the training of regional pilots have made it harder for Cleveland to compete with other airports. If true, that's business.

Cleveland has been dumped, but it's not the end. The city of Cleveland has to brush itself off and go out and find a new air carrier to replace United.

Christopher Evans, editorial writer, Northeast Ohio Media Group:

United we don't stand, and that's all right with me. The decision to jettison 470 local jobs and more than 50 percent of their nonstop destinations out of Cleveland Hopkins International Airport was driven by the bottom line -- the kind of cold-blooded capitalism that rockets the 1 percent into the stratosphere.

The choice United made does not reflect on Cleveland. It simply demonstrates that their invitation to "fly the friendly skies" is a con.

"I can't say, 'Thank you,' enough to customers when I meet them," Jim Compton, vice chairman and chief revenue officer, confided in a meeting at The Plain Dealer.

Is this guy kidding, or what?

Elizabeth Sullivan, opinion director, Northeast Ohio Media Group:

United is being more than a little disingenuous to imply that after a decade of losses at Cleveland Hopkins, it is only now awakening to the business need to dump the hub. The truth is, these have been rocky times for the big airlines -- hence the mergers and consolidations steadily robbing small- and medium-sized markets of air traffic. Cleveland wasn't even United's most money-losing hub until recently; United CEO Jeff Smisek said in 2012 in Cleveland that Hopkins' "performance is better than some other hubs in terms of profitability." Hopkins' fall from grace has more to do with the changing economics of the regional jet market, accelerated by new federal training and flight-time requirements for pilots -- and there's not much the city can do about that. Even United acknowledges that this was their friendliest hub, with great customer-service ratings and exceptional support from the city and local air travelers. Too bad the airline couldn't see its way clear to phase out much of the unprofitable regional jet service and keep Cleveland as an expanded hub for larger aircraft.

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